Yesterday, I received a message from one of my followers on LinkedIn -a Brazilian student taking a petroleum engineering course- asking about my opinion on whether it is worth it to stay in the oil and gas industry right now or it is better to move to other industries. The student expressed his worries about his future after graduation and the fact that he may end up like many others who have not got any job opportunity yet in the oil industry. To be honest, he is not the only one concerned right now, with the recent turnaround in the oil market and the growing bearish sentiments, everyone is worried.
Over the past two years, I have been sharing my advice on how to survive the oil market downturn and what are the things O&G young professionals, fresh grads, and students can do to increase their chances of securing a job and staying ahead of their peers. However, in this article, I will only be sharing one thing, and that is the answer to the question “Should I Stay or Should I Leave the Oil Industry?” But before I do that, let me give you a quick overview of the current oil market state and possible outlook, so that your decision can be supported by an evaluation of the current state of the oil market and what is expected to happen in the near future.
Over the past three months, oil prices were sustained somewhere around $55/bbl following OPEC and Non-OPEC deal to cut oil production. Prices were supported by a good compliance from OPEC’s members and some of non-OPEC producers to the production cut deal. But throughout this period, a risk to oil prices –which I have predicted– was growing somewhere in the US due to the continuous increase of rigs drilling for oil, buildup in US crude inventories, and the ramp up of oil production. And it was a matter of time before we reach to where we are right now where the imbalance of fundamentals is pushing prices down.
Oil prices now are hovering around $50/bbl after falling from above $55/bbl in the last few weeks. US producers are ignoring all warning signs and continue to increase their drilling rigs and they will only stop if prices drop to around $40/bbl. But oil prices falling below $40/bbl seems highly unlikely as Saudi Arabia is preparing for Armco’s Initial Public Offering (IPO) which requires the oil market to be stabilized. KSA will try its best to keep oil prices from falling in order to prevent any negative impact to Armco’s IPO, and it appears that they will do it even if they lose some market share in the process. US producers seem to be taking advantage of this soft spot and will push the Saudis to extend the current production cut period or propose another production cut if things got worse.
The bottom-line is, oil prices will not go below $40/bbl for the sake of preparing the oil market for Armco’s IPO, and it will not also go above $60/bbl due to the growth in US crude inventories, oil production and rig count. For the medium-term, oil prices will fluctuate between $40/bbl at worse case scenario, and $60/bbl at best case scenario. Any expectations of a spike in oil prices due to high demand and lack of supply is nothing but wishful thinking. The world is awash with oil and many oil producers are cutting their oil output to help the market recover and others are just waiting for the prices to go up to start pumping again.
Now that you have a clear overview of the oil market, let’s go back to answering the question posed earlier by the student, and that is, should I leave the oil industry, or should I stay?
The answer to this question is not a straightforward stay or leave, it is more of a balance between reality and passion, risks and benefits. When it comes to reality, the oil industry is in a better state than a year ago, but uncertainty and risks are still too high. Surely there will be no another sharp downturn ahead -which means no more layoffs, but of course no boom as well at least for the two years. Prices will remain in a range between $40/bbl and $60/bbl for sometime.
Based on this outlook, the job market will slightly grow and we may see companies slowly increasing their recruitment activities. If you decided to stay, be prepared to face a high competition in the job market and find out how can you present yourself differently. And if you decided to leave, it might be a good decision especially if you found a good job out there and you are not passionate about the oil and gas industry. But it may also be a bad decision that you will regret especially if you work on something you don’t like and you are passionate about the O&G industry.
When it comes to passion, I can tell you -based on my personal experience, nothing will drive your success as passion does, nothing will make you able to face all obstacles and challenges you might face and come out stronger like passion does. So, if you are passionate about the oil industry, my advice to you is, STAY. If you are really passionate about the oil industry, leaving it will be one of the worst decisions you will ever make. Stay, improve yourself, work hard, identify your area of interest, learn more about it, attend training if you can, enhance your online presence, connect with people in the same field, ask them questions, make yourself visible, attend conferences, expand your network, and trust me, opportunities will come, and if it didn’t, create them.
I graduated from the university more than two years ago. At that time, it was the beginning of the oil market downturn, and I lost two job opportunities. I had no source of income, but I didn’t give up, neither I thought of going into another industry. I was passionate about the oil industry and I didn’t care about the lack of jobs, I wanted to create opportunities myself. I spent few months evaluating myself, understanding my strengths and weaknesses, and aggressively learning about the oil industry.
I knew what I wanted to achieve and the things that I needed to improve, and I went for it. I attended training courses, some which were for free. I dug deeper into the industry to understand it better and I connected with experienced people from whom I learnt a lot. All my focus was about the oil industry, and it paid off. Here I am today, doing what I really love, and I can tell you, there is nothing as great as doing what you really love.
